From: Quinlivan, Stephen [stephen.quinlivan@leonard.com]
Sent: Wednesday, January 02, 2002 10:53 PM
To: SEC Comments (E-mail)
Subject: S7-23-01
To: Jonathan G. Katz
Secretary
U.S. Securities and Exchange Commission
450 Fifth Street NW
Washington DC 20549-0609
Date: January 2, 2002
Re: Comments on Proposed Rule Defining the Term "Qualified Purchaser"
File No: S7-23-01
My name is Steve Quinlivan and I am a practicing securities lawyer, and the
views expressed herein are my own and not those of any firm or client. In
general, I support the proposed rule. Inconsistent state rules regarding
the definition of "accredited investor" impair efficiencies related to
capital formation and do little to protect investors.
Specifically:
--I support the Commission's conclusion that the definition of "qualified
purchaser" should be the same as "accredited investor". Using the
definition of "accredited investor" is more appropriate than the other
possible definitions considered by the Commission.
--This is an appropriate arena to preempt state regulation. Practice has
demonstrated that few abuses have occurred when relying on the definition of
accredited investor. Thus, inconsistent state regulations amount to little
more than a trap for the unwary-an unneeded barrier to capital formation.
--Perhaps the Commission could more specifically address the effect of
preemption. Clearly, a state can still require a notice filing. But what is
the effect of failure to comply? Is recision still an appropriate remedy? I
believe not, as that would be contrary to the goal of uniform regulation.
--I support the Commissions proposal with respect to Rule 504 offerings
wherein a new, uniform federal accredited investor exemption would be
created. Simply stated, many issuers cannot adequately raise capital short
of a public solicitation. Investment banks simply are not interested in
small offerings.
--With respect to matters being considered with respect to Rule 504, the
Commission should consider what type of solicitation would be permitted by
the internet or on an issuer's web site. Certainly a notice seeking
investors would not impair the public interest any more than a tombstone ad,
if the content of the solicitation is regulated to the same extent as a
tombstone ad.
Very truly yours,
Steve Quinlivan